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Enrolling Customers In Mobile Pay Networks Could Triple Cross Channel Effectiveness

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phone_moneyRetailers who start now building an enrolled customer base for mobile applications and mobile payments will be ahead of the game in the competition to garner the fast-growing mobile commerce revenues, said Richard Crone, CEO of Crone Consulting to a room full of top industry CIOs at the NRFtech meeting in Half Moon Bay, CA this week. “If you are able to control mobile payments registration inside the retail application it will triple your cross-channel effectiveness,” Crone stated. “It is mobile on steroids.”

Crone revealed the details of a new mobile program to the NRFtech attendees that will facilitate the ability for retailers to offer their own mobile payment service to customers without adding any new hardware or becoming dependent on bank- or carrier-controlled Near Field Communications (NFC). “It is a server-resident mobile wallet, located in the cloud,” he explained. Customers using smart phones will be able to complete secure transactions by scanning a barcode at checkout.

The benefits of this new approach are numerous for retailers who can motivate shoppers to enroll. Four primary benefits include the ability to:
  1. Leverage the mobile channel to make customers contactable in real time
  2. Promote lower cost tenders (such as private label credit or retailer-owned bank card)
  3. Prevent building another company’s mobile business with NFC
  4. Position the retailer to reap substantial mobile advertising revenue

female_phone_cardSignificant Savings for Retailers

Enabling mobile payments for customers can provide substantial financial benefits for retailers. For example, a retailer with annual revenues of $7-10 billion could save an estimated $30 million each year in part from encouraging shoppers to use lower-cost tenders. Also, because mobile customers shop more frequently and spend more per purchase, retailers’ revenue will increase sharply. On average, customers spend 10% to 20% more on debit cards with mobile banking, Crone reported.

Now is definitely the time to move forward with shopper enrollment, Crone continued, noting that 57% of consumers recently surveyed stated that they want mobile payment and 90% of those consumers said they would pay more for the ability to pay using the mobile channel. Additionally, 64% would switch carriers for mobile payments and 58% would switch banks.

“There has been some talk in the industry of an advertising-sponsored payment network” that would offer significant financial benefits to shoppers and would woo them away from retailer-based payment networks. Before that happens, Crone warned, retailers should build their enrolled customer base now.